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OVERVIEW GLOBAL MARKET PAPAYAS

The demand for papayas in Europe is on the rise, even though the product is still perceived as exotic in many countries. This is very different in the US, where papayas are considered mainstream. In countries in the southern hemisphere, papayas are certainly not exotic. Latin America, Africa and Asia grow large volumes of the fruit. The season in South Africa has only just reached its peak; in Australia, growers were hit by a storm that decimated the supply and, meanwhile, Latin American countries are seeking export opportunities. Costa Rica is looking to Canada, Brazil to Europe, Mexico to the US, and Ecuador to both Europe and the US. Peru mainly produces yellow papayas, a variety that is unknown in Europe. Europe, in fact, may become a competitor for the Latin American countries, as Spanish growers are investing in the greenhouse cultivation of this exotic fruit.

Storm affects growers in Western Australia
This week, a storm hit the Kimberley region's Ord Irrigation Scheme, in Western Australia, causing much damage to papaya crops in that region. The three major producers in the region have reported significant damage. It is expected that they will lose 60 to 80 percent of the harvest. The impact of the storm was immediately noticeable in the markets in Perth. Traditionally, the volumes from the Kununurra region account for 70 percent of the supply from Western Australia. "We consume only papayas from Western Australia due to quarantine regulations," explains a trader. "The fruit from the eastern states does not enter Western Australia." As a result of the smaller supply, prices increased from $ 3-4 per kilo to $ 4-5 per kilo. If prices rise too high, stores remove the product from the range. In about four or five months, the supply will be restored.

Falling prices in China due to growing acreage
Papaya crops are mostly found in southern China, especially in the eastern part of the Hainan Province. The fruit ripens in ten months and is harvested year round. The most common papaya is the white variety. Two years ago, heavy investments went to expanding the acreage in the Chinese province. As a result, the price has significantly fallen this year.



South African season just passed its peak
The harvest in Mpumalanga has just passed its peak. The drought and heat have played tricks on the growers. "We had a little less volume due to the drought and there were some quality issues," explains a major producer. The production usually reaches 12,500 tonnes, although this year's volume will be slightly lower. Papino and Neo Essence are the two main varieties for this grower, but tests are being carried out with other varieties. Besides selling them in the domestic market, some of the papayas are also exported. The grower affirms they ship 2,000 boxes per week to the UK and the Middle East.

Mozambique to fill South Africa's gaps
A major South African grower has crossed the border and started cultivating papayas in Mozambique. This year, the first commercial volumes are expected. "It's going very well," states the producer. "We expect the first harvest in January." At this moment, we are still working on the packing centre. The Mozambican supply should fill the gaps in the South African season. Although labour costs in Mozambique are lower than in South Africa, this is partly offset by higher transport costs.

Costa Rica focuses on Canada
Although the cultivation of papayas is relatively small, Costa Rica has a unique variety. The seeds for this Pococi are produced by a state project. The cultivation is possible year round. The fruit is mainly shipped to Canada. The Canadian market for papayas is great, says an exporter, mainly due to the large number of immigrants from Latin America and Asia. For these populations, papayas are not exotic. In April, August and September there is some competition from Mexico in this market. Another factor that also plays a role is the shorter transit time between Costa Rica and Canada. It takes about 9 days to arrive, while reaching Europe takes 14 days. The acreage in the Central American country is small; it is currently estimated at just 60 hectares, but thanks to investments, the acreage should double next year, according to a producer.

Original variety a success in Brazil
In recent years, the Original variety has become popular in Brazil. More growers have been switching to this variety that, in contrast to the Golden, is less rounded and has a longer shelf life. In just two years, the Original has reached a market share of 70 percent in the wholesale market of Sao Paulo, a market with 15 million people. Two years ago, the market share was only 5 percent. Companies are trying to export it successfully to Europe.

Drought limited papaya production in Colombia
Because of the drought, there is little papaya available. Many growers had to choose what crops to have irrigated. Growers who chose papayas have had a good season, as besides the dryness, the conditions were good. Colombian papayas are mostly distributed in the domestic market.
 
Peruvian papayas for the processing industry
Peruvian growers are able to supply papayas all year round. About 80 percent of the production corresponds to a small variety that is mainly used by the processing industry. There is no big export market for this variety, because the fruit is yellow and Europe has a preference for the red papaya. Some growers are looking to find export contacts in Europe.

Demand exceeds supply in Ecuador
The supply of papayas is currently about average and demand is high. The number of producers is still limited, but this number increases every year. The main export markets are the Netherlands and the US. The country has a year-round supply. There are plans to launch a promotional campaign in Europe.

Mexico, a large producer
In September, a study was published on the market situation of papayas from Colima, in the Tecoman valley and in a number of major cities. The highest price paid to growers reached $ 8.50 per kilo, while the lowest stood at $ 7.50 per kilo. In 2015, the region of Colima accounted for 108,996 tonnes of papayas, which means the region had a share of 12 percent of the total Mexican production. Most of the production concentrates in the states of Oaxaca (274,525 tonnes, 31%), Chiapas (162,876 tonnes, 18%), Colima (108,996 tonnes, 12%) and Veracruz (102,488 tonnes, 12%). The total papaya production in Mexico stood at 883,859 tonnes.

On the wholesale markets, papayas were sold for a price of between $ 10.32 and $ 12.87 per kilo. In the supermarkets, they oscillated between $ 16.32 and $ 20.27 per kilo. The biggest margins were obtained by Guadalajara, where the papayas reached $ 20.27 at the supermarket shelves. That is a margin of 170 percent. The lowest margins were obtained in Leon, Guanajuato, with 123 percent.

Papaya a mainstream product in the US
Consumption in the United States has increased sharply in recent years. All supermarkets have papayas in their range. Although the fruit is not yet as well-known as avocados, mangoes and pineapples, a trader affirms that papayas are still regarded as a mainstream product. The Maradol is the dominant variety in the US market. The fruit is imported year round from Mexico. Currently the price stands at around $ 16. The market share of the Maradol grows at the expense of the Solo, which is mainly grown in Brazil and Belize. Florida cultivates the Tainung, which is popular among the Asian part of the population.

Sweden no market for papayas
According to a major Swedish retailer, there is no market for papayas in the Scandinavian country. A representative of the supermarket explains that several years ago, they added the exotic fruit to their range, but there was no demand for it. Other exotics, such as mangoes, kakis, Sharon fruit and pineapples do better. The reason for the low consumption, according to the supermarket chain, is the unique flavour of papayas and the fact that the taste is altered by the cold chain. As a result, the taste is different than in the tropical countries, where the fruit is harvested ripe. There are no plans to increase the volume in the coming years. The introduction of papayas requires a substantial investment. The fruit is available year-round in Brazil and costs between 3 and 4 Euro per piece.

Great demand in the Netherlands caused by air freight problems
Following the success of mangoes and avocados, the popularity of papayas is also on the rise. In recent years, the exotic species has recorded a growing demand. According to importers, that demand remains fairly stable throughout the year. Currently, the demand is especially large because there were some issues with the air shipments. Papayas are available year-round. The origin of the Solo Papaya is Ecuador, while Formosa and Golden papayas come mainly from Brazil. Dutch importers market the papayas across Europe and affirm that Russia is still a good market for the Formosa variety. Papayas are known in Brazil for their beneficial effects on the gastrointestinal tract, and consumers in Europe are also becoming more and more familiar with the fruit's healthy nutritional properties.

Papayas, a luxury product in Italy
In preparation for the December holidays, wholesalers in Italy are getting ready to meet the increased demand for exotics. In recent years, the demand for mangoes, avocados and papayas has been on the rise, according to a wholesaler in Bologna. The exotics are not just a niche product, but also for the premium segment.

Currently, the papayas marketed in Bologna are flown in from Brazil, which has year-round supply. That has an impact on prices, which are significantly higher than for the Italian fruit. Papayas cost around 4 Euro per kilo and this price remains stable all year round. Cheaper papayas are also available, namely those shipped from Ecuador and Central Africa, including Ivory Coast. The price for these oscillates between 2 and 2.50 Euro per kilo.

Spain invests in greenhouse papayas
The papaya season is currently underway in three regions: Malaga, Almeria and the Canary Islands. The harvest kicked off in the second week of November after a hot summer with lots of sunshine. Therefore, the first crop has a high Brix level. The harvest will continue until April. The production is still very small, but there are great expectations for the future. In the past, the fruit's production was only possible in the Canary Islands, but recently growers in Malaga, Granada and Almeria have been investing in greenhouse cultivation. The product is seen as an alternative to greenhouse vegetables. The conversion of the greenhouses, however, requires making an investment, because the climate conditions in the greenhouse must be adjusted. The market for papayas is growing and producers believe they have an advantage over Brazil. The hope is to become a major player in the European market.

Papaya no high flyer in Israel
While papayas are growing in popularity in many countries, in Israel the fruit remains a true exotic. It is still one of the most well-known exotics, but consumption remains low. The domestic market is too small. There is a niche market, mostly around Thai cuisine and Thai stores. That demand is fulfilled by some local producers and importers. Because of the small demand, the price remains stable year-round at around 6 Euro per kilo.

The cultivation of papayas is not possible in many parts of Israel. Attempts have been made to grow varieties able to withstand the hot summer and relatively cold winter, but such tests have not yielded any positive results. The focus is now on developing new varieties. A trend that contributes to the success of the crop is the investment in greenhouses and nets that protect the plants from wind and prevent excessive temperature fluctuations. The fruit's cultivation is mainly found in the coastal regions where bananas are grown. However, the acreage is very small and amounts to fewer than 10 hectares.



Every week, FreshPlaza and AGF.nl publish an overview of the market situation of a product in a global context. With these articles we aim to provide a view of a global market shrinking due to globalisation. Next week, oranges will be on the spotlight.
 

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